Copart Q4 Earnings Call Highlights

Fourth-quarter revenue rose 2.4% to $1.2 billion , helped by higher revenue per unit and selling prices, but profitability weakened: net income fell 17.4% to $327.4 million and operating income declined 10.6%.

Global units sold decreased 2.9%, driven by a 5.7% U.S. decline, while international units grew 10%.

International revenue and gross profit each increased about 12%, making overseas operations a key growth driver.

Copart agreed to acquire digital automotive marketplace ACV in an all-cash deal expected to close by year-end. ACV will remain a separate subsidiary, with Copart targeting breakeven initially and accretion in fiscal 2028.

Copart reported fourth-quarter fiscal 2026 revenue growth despite lower global unit sales, as higher selling prices and international expansion helped offset weaker domestic insurance volumes. The company also announced an agreement to acquire ACV, a primarily digital automotive marketplace, in an all-cash transaction expected to close by the end of the calendar year.

Chief Executive Officer and Executive Chairman Jay Adair said Copart remains focused on three growth pillars: international expansion in insurance, domestic expansion in whole-car sales, and technology and services for customers. He described buyer liquidity, operational speed and a long-term founder-led approach as key differentiators for the company.

Consolidated fourth-quarter revenue rose 2.4% year over year to $1.2 billion.

Global service revenue increased by more than $13 million, or 1.4%, while purchased vehicle sales increased $14 million, or 8.3%, Chief Financial Officer Leah Stearns said.

For fiscal 2026, revenue totaled $4.7 billion, up 0.4%. Stearns noted that fiscal 2025 benefited from Hurricane Helene and Hurricane Milton. Excluding the impact of those events, fiscal 2026 total revenue increased 2.4%.

Fourth-quarter revenue per unit increased 5.4% year over year. Full-year revenue per unit rose about 5.7%.

Global average selling prices increased 3.5% in the fourth quarter and 5.5% for the full year.

Fourth-quarter gross profit declined 5.5% to $481 million, with gross margin of 41.8%.

Operating income fell 10.6% to $368.9 million in the quarter.

Net income attributable to Copart declined 17.4% to $327.4 million, or $0.35 per diluted share.

Stearns said the net-income comparison reflected a $13 million gain on asset disposals in the prior-year fourth quarter, as well as lower interest income after Copart deployed $1.63 billion toward share purchases earlier in fiscal 2026.

Full-year net income attributable to Copart decreased 4.4% to $1.48 billion, or $1.55 per diluted share.

Full-year operating income declined 2.6% to $1.7 billion.

Global units sold declined 2.9% in the fourth quarter, including a 5.7% decrease in the U.S. and a 10% increase internationally.

Global insurance units fell 4.2%, with domestic insurance volume down 7.5% and international insurance units up 11.2%.

Adair said that, excluding the loss of one customer, domestic insurance assignments would have increased 2.3%.

He attributed broader insurance-volume pressure to lower collision claim frequency, which declined 3.4% year over year.

However, he said total-loss frequency rose to 23.3% in the second quarter of fiscal 2026, the highest second-quarter level on record, while average collision severity exceeded $6,300 per claim, up nearly 8.8%.

Adair said increasing vehicle complexity could support future total-loss...